Norwegian Air flying high, with huge order for new jets

Norway's ambitious and aggressive cut-rate carrier confirmed major expansion plans on Thursday by announcing an order for as many as 84 new Boeing 737 jets. The new aircraft will also help Norwegian Air expand its ever-growing route system.

It was just last week that Norwegian Air announced that it will set up a new hub at a former military airport in southeastern Norway, at Moss between Oslo and Fredrikstad. Direct flights to several European destinations will start in February, and ticket sales are reportedly booming.

Now Norwegian's ambitious chief executive, former fighter jet pilot Bjørn Kjos, has placed what his airline is calling "the largest order in Europe received by Boeing for the company's 737 series thus far in 2007."

The deal, for 42 new Boeing BA.N 737-800 jets and an option for 42 more, is valued at USD 3.1 billion, or around NOK 18 billion. Norwegian also ordered 11 Boeing 737-800 jets earlier this year.

The new aircraft will be delivered from 2009 through 2014, and "will strengthen Norwegian's competitive position in the Norwegian, Nordic and European aviation markets," Kjos said. He added that the new aircraft "will open up new opportunities, enabling us to fly longer distances and thus consider new, interesting routes."

Norwegian, SAS' biggest rival in the Norwegian market, claimed the new aircraft will consume 33 percent less fuel and can carry around 40 more passengers per flight than its existing aircraft.

Praise for Kjos
Analysts widely praised the deal, with one calling it "a fantastic offensive" move. "The aircraft they're buying are bigger, cheaper, better and more environmentally friendly, and they’ll also get a uniform fleet," Per Haagensen, an analyst at Fondsfinans, told business news web site E24.

Hans Erik Jacobsen of First Securities in Oslo called the order for up to 84 new Boeing jets "very positive," because it will allow Norwegian to expand with "good flexibility." The new aircraft will also lower costs and boost Norwegian's competitiveness.

Boeing officials, meanwhile, called Kjos "a tough negotiator" who made a lot of demands, and inidicated that Boeing had to make concessions to win the deal over Airbus.

Kjos told E24 that Airbus was a "serious alternative" until Wednesday, when the Boeing deal was struck. He added that he didn't see any problems arranging financing for the deal.

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